Pinnacle to build pellet plant in Alberta, signs 2 new contracts

Pinnacle Renewable Energy announced plans in early July to build a new pellet plant in Alberta. Later in the month, the company said it has entered into two new long-term, take-or-pay off-take contracts with customers in Japan and South Korea.

Pinnacle announced July 4 it has entered into a limited partnership agreement with Tolko Industries to build Northern Pellet Limited Partnership, a wood pellet facility to be located on land owned by Tolko in High Level, Alberta. Once operational, the facility is expected to have the capacity to produce 170,000 to 200,000 metric tons of pellet annually.

Construction on the proposed pellet plant is expected to begin during the third quarter of this year, with initial pellet production scheduled to begin in the fourth quarter of 2020.

Tolko and Pinnacle will each own a 50 percent interest in the facility. Pinnacle will operate the plant and manage all aspects of customer relations, marketing, sales and logistics. Tolko will supply heat and fiber to the facility under long-term supply agreements.

Later in the month, on July 15, Pinnacle announced it has entered into two new long-term, take-or-pay off-take contracts with customers in Japan and South Korea. The company said the contract in Japan is an extension of an existing contract with Mitsubishi Corp. Under the contract, Pinnacle will supply 110,000 to 120,000 metric tons of industrial wood pellets annually to Mitsubishi beginning in 2021.

The contract in South Korea is with GS Global Corp. Under that contract, Pinnacle will supply 100,000 metric tons per year of wood pellets to BS beginning in 2022.